Daily Market Report 05/07/12

GOLD
Gold declined on Monday based on political upheaval in France and Greece leading to a weaker euro (stronger U.S. Dollar) and softer commodity markets. At 11am PDT, Gold is trading at $1,639.60, down $4.90 per ounce on very active volume.  

Why is the new French President bullish for Gold and Silver prices?
The new French President, Francois Hollande (a socialist) has campaigned on a promise to promote government stimulus programs rather than focus on the harsh austerity measures Sarkozy favored. Hollande has said that his first task as president will be to call for a renegotiation of the European budget-trimming treaty, spearheaded by Sarkozy and German Chancellor Angela Merkel. Hollande wants to see more government-funded stimulus programs instead of drastic cuts across the board.

SILVER
When Silver hit $29.60 per ounce this morning, the war between the bulls and bears started. As the Silver price increased on excellent volume the price rallied back to $30.39. At 11am PDT, Silver is down $0.23, trading at $30.12 per ounce. It is important for the short term Silver price that $30 per ounce holds as major support.
 
The Shanghai Futures Exchange (SHFE) is all set to launch Silver futures trading on May 10, 2012. China is one of the biggest producers and consumers of Silver in the world. The contract size is set at 15 Kg (500 troy ounces) with a minimum margin requirement of 7%. The daily price range has been fixed at 5%.